Prodded by a mini-scandal plus a Jimmy Carter promise that may prove hard to keep, the federal government is beginning a new search for an effective way to weave a minority thread into the fabric of American business.
In the White House, Commerce Department, Small Business Administration and Congress, old programs for minority business development are being reviewed and new ones put in place - or at least announced - as the government takes its longest look in a decade at the problems of minorith entrepreneurs.
Minority businesses are, first and foremost, small businesses, founded by people who be against all the odds that the enterpreneur's deam of success can still come true.
It is not a bet any sensible gambler would take.
Each year, close to 200,000 small businesses are founded across the country. Regardless of the color of their owners' skins, 50 per cent of them fold within two years, according to SBA estimates. But minority businessmen, burdened by discrimination in the marketplace, stand even less chance of surviving.
In recent months, the federal behemoth has shown signs of stirring in the direction of minority businesses.
In September, shortly after Urban League director Vernon Jordan delivered a stinging attack on President Carter for not following through on campaign promises to blacks, Carter pledged to double the volume of federal purchases from minority businesses in two years.
That would mean close to $1 billion in government business for minorities by the 1979-80 fiscal year - if it can be achieved. Carter has said he does not favor new legislation now, and several sources contend the goal cannot be achieved without drastic changes in current programs.
Carter also revived an interagency council on minority business development that had lain dormant for several years. Its mission, under the direction of Under Secretary of Commerce Sidney Harman: exploring ways to increase minority participation in the private sector as well as with the government.
In Congress, Sen. Bennett Johnston (D-La.) and Sen. Gaylord Nelson (D-Wis.), chairman of the Small Business Committee, have introduced a bill to consolidate within SBA the minority loan packaging and techinical assistance programs now scattered among three agencies.
On the other side of the rotunda, Rep. Parren J. Mitchell (D-Md.) has introduced a bill in effect creating a mini-SBA within the existing agency to concentrate soley on the problems of minority businessmen.
Meanwhile, the government' main vehicle for assistance to minority businessmen. SBA's "8a" program, has been rocked by allegations of scandal that forced a temporary moratorium on new entrants.
Under 8a. federal agencies offer selected contracts to SBA, which subcontracts the work to firms owned by persons who are "socially or economically disadvantaged."
Hearing by Sen. Lawton Chiles (D-Fla.) disclosed that some of the 8a money was going to blacks acting as front men for white-owned businesses, while other money went to blacks who did not appear disadvantaged.
After the hearings, Administrator A. Vdrnon Weaver imposed a 3 1/2-month moratorium on admissions of new firms to 8a.The entire program is now under review within SBA.
Combining contracts with loans and technical help, 8a is supposed to function as a sort of incubator, where businesses are norished and housed until ready to cut the SBA umbilical cord and compete in the real world.
But the offspring often don't make it. Of the more than 3,000 companies involved with 8a since 1968, only 112 have "graduated" to self-sufficiency.
Of 8a companies, Edward Lewis, SBA's associate administrator for procurement, says:
"At this point in time. IL don't see them graduating to anything. Tere is a missing element.Tere needs to be something on the tail end of 8a, to bridge the gap between where the program ends and where the market picks up."
Most often cited as the "missing element" is the fundamental skill of picking a field that offers adequate markets for survival and expansion.
"They get into the wrong businesses," said Pat Cloherty, SBA's second-in-command. "There is a tendency to overvalue the educational experience" of 8a's limited procurements, she said.
"Our interest is in businesses which have a chance of surviving and thriving through the years," Cloherty said. "I think the key is really taking markets seriously; from the beginning, asking if there's a market for this company in the outside world."
SBA has begun lending to minority firms entering the telecimmunications industry, while the Commerce Department's Office of Minority Business Enterprise is puhing "growth industries" like energy.
But most of the firms in the 8a portfolio now are small construction firms, janitorial or maintenance companies, or providers of services such as barber and beauty shops.
Many of them look like the business Delano Page started in Richmond in 1971: by rights, they should not survive. And they won't.
Page opened a resturant in a deteriorating section of Richmond that summer. An independent consultant concluded he needed a $25,000 loan from SBA to make it work.
SBA granted Page a loan of $18,500. By the time he had bought the restaurant, stocked it, paid deposits on his utilities and his license fee, Page said, he had $600 left for operating capital.
Shortly after he opened, a hurricane damaged the restaurant, the aging freezer in the back room went on the blink, and Page was suddenly out of money and well on his way to being out of business. Crippled by a lack of capital, Del Page's Restaurant folded in early 1973.
"There wasn't a place in that area that could match the food I served," Page reminisced the other day. "But I just didn't have any money . . . SBA should give a man enough to be successful, or keep their five or ten thousand dollars."
Undercapitalization is one of the biggest problems minority businesses face. Critics charge that SBA makes undersized loans because it is more concerned with the number of firms in its portfolio than with their chances of success. SBA officials say their future focus will be on successes rather than numbers.
The newest government thrust moves away from set-aside contracts toward a requirement that white-owned businesses give set percentages of the government work they recieve to minority businesses in the form of subcontracts.
A Mitchell amendment to the bill authorizing $4 billion for local public works projects through the Economic Development Adminstration stipulates that 10 per cent of the work - $400 million worth - be done by minority firms.
The requirement has touched off a series of lawsuits by contractor organizations, which contend it unconstitutionally deprives white contractors of the opportunity to participate fully in the projects.
A federal judge in California has ruled the requirement unconstitutional, finding the 10 per cent "illegal, contracy to law, and arbitrary, capricious, and unreasonable."
The ruling, however, does not affect the $4 billion currently allocated to the program.
By basing his ruling on the bill's requirement that 10 per cent of the work be done by "minority owned" firms, the judge highlighted a small but vexing problem of government programs for minority businessmen.
The SBA regulations say the 8a program is for "socially or economically disdavantaged persons;" OMBE defines that group as including but not limited to "Negroes, Puerto Ricans, Spanish speaking Americans, American Indians, Eskimos, and Aleuts;" the public works bill describes "socially or economically disadvantaged" the same way, but a Transportation Department program for minority business includes women under its unbrella.
As the Bakke medical school admissions case suggests, the government has not yet hit upon a way of saying "this program is for minority group members" without offending the Constitution.
For all its searching, the government is not likely to come up with many new ideas about minority businesses. The problems - lack of capital, lack of experience or management skills, and markets - are well known. And equally refractory.
"Almost everybody identifies the four or five key components of the problem," said a top aide to Mitchell. "Now we need to identify solutions, and start implementing them."